Greece is «highly unlikely» to end its eurozone bailout program without some new form of assistance that will require it to meet targets, a senior EU official said on Monday.
“A completely clean exit is highly unlikely,» the official told reporters.
“We will have to explore what other options there are. Whatever options we may be adopting, it will be a contractual relationship between the euro area institutions and the Greek authorities,» the official said.
The EU official said he expected eurozone ministers and Greece to decide on how best to help Athens at a meeting of finance ministers in Brussels on Dec. 8. That should give time for parliamentary approval before the December recess.
The official gave no details of what new aid might look like, but policymakers have said that the most likely tool is an Enhanced Conditions Credit Line, or ECCL, from the European Stability Mechanism.
That means Greece would be under detailed surveillance from the European Commission, the EU executive, for the duration of the credit line.
“There needs to be money available for drawing on,” the official said. “If you look at market volatility over recent weeks, one doesn’t need any further explanation of why a contractual arrangement makes sense.”
The eurozone bailout support finishes at the end of this year but the government is planning not to accept the remaining loan tranches from the International Monetary Fund, due to run until spring 2016. This would allow Greece to exit the bailout at the end of this year.
To do this, though, the government plans to create a precautionary credit line from the money that has been left in its bank recapitalization fund.
The senior eurozone official said on Monday that the unused funds could be used in a new credit line for Athens.
Greece has some 11 billion euros left with the Hellenic Financial Stability Facility (HFSF), but results of the European Central Bank Asset Quality Review and stress tests showed that only a fraction of that sum will be needed.
“What is left over from the recapitalisation buffer could be used in such a programme or credit line,» the senior official said on condition of anonymity.
[Kathimerini & Reuters]